Insertions and deletions (indels) are considered to be rare evolutionary events, the analysis of which may resolve controversial phylogenetic relationships. Indeed, indel characters are often assumed to be less homoplastic than amino acid and nucleotide substitutions and, consequently, more reliable markers for phylogenetic reconstruction. In this study, we analyzed indels from over 1,000 metazoan orthologous genes. We studied the impact of different species sampling, ortholog data sets, lengths of included indels, and indel-coding methods on the resulting metazoan tree. Our results show that, similar to sequence substitutions, indels are homoplastic characters, and their analysis is sensitive to the long-branch attraction artifact. Furthermore, improving the taxon sampling and choosing a closely related outgroup greatly impact the phylogenetic inference. Our indel-based inferences support the Ecdysozoa hypothesis over the Coelomata hypothesis and suggest that sponges are a sister clade to other animals.